News; Nike Zoom KD Kevin Durant 7 Basketball Shoes - Black/White

Published: Monday 28 March, 2016

10 Earnings Call Transcript Good afternoon everyone. Welcome to Nike's fiscal Cheap Nike Basketball Shoes Third Quarter Conference Call. Leading today's call is Pamela Catlett, Vice President Investor Relations. Before I turn the call over to Mrs. Catlett, let me remind you that participants on this call will make forward looking statements based on current expectations, and those statements are subject to certain risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are detailed in the reports filed with the SEC, including Forms 8 K, 10 K and 10 Q. Some forward looking statements concern future orders that are not necessarily indicative of changes in total revenues or subsequent periods due to a mix of features and at once orders, exchange rate fluctuations, order cancellations and discounts, which may vary significantly from quarter to quarter. In addition, it is important to remember a significant portion of NIKE, Inc.'s business, including equipment; most of Nike Retail, NIKE Golf, Cole Haan, Converse, Hurley and Umbro are not included in these features numbers. Finally, participants may discuss non GAAP financial measures. The presentation of comparable GAAP measures and quantitative reconciliations are found at NIKE's Web site. Now, I would like to turn the call over to Pamela Catlett, Vice President, Investor Relations. Thank you. Hello everyone and Happy St. Patrick's Day. Thank you very much for joining us today to discuss NIKE'S fiscal 2010 third quarter results. As the operator indicated, participants on today's call may discuss non GAAP financial measures. Joining us on today's call will be NIKE, Inc.'s CEO, Mark Parker, followed by Charlie Denson, President of the NIKE Brand, and finally you will hear from our Chief Financial Officer, Don Blair, who will give you an in depth review of our financial results, following their prepared remarks we will take your questions. We would like to allow as many of you to ask questions as possible in our allotted time. So as usual, we would appreciate you limiting your initial questions to two. In the event you have additional questions that are not covered by others, please feel free to re queue and we will do our best to come back to you. Thank you very much for your cooperation on this. With that I would like to turn the call over to NIKE, Inc. President and CEO, Mark Parker. Thanks, Pam, and hello everybody. In our last call I said, given what we know about the marketplace and about ourselves, we're well positioned to leverage the power of global sports and drive hard against those growth opportunities that have the most impact. Q3 shows this to be the case. NIKE is more than a survivor in these tough economic times. We're able to manage up and through the recession to expand separation for our brands and our businesses. We've returned to top line and bottom line growth in our third quarter, both on a real and constant dollar basis. With few exceptions we're seeing improving trends across all NIKE Brand product types, categories and geographies, as seen in our strong acceleration of global futures orders. Our other businesses continue to deliver brand heat, while increasing revenue and profits. And we're delivering record cash flows, driven by clean inventory positions and the tightest supply chain we've ever had. We're very pleased by the results for the quarter. Revenue increased 7% to $4.7 billion. Inventories are in great shape, down about 13% compared to last year. Gross margins were up 3 points due to hot products, elevated consumer experiences in the marketplace and operational excellence inside. Worldwide NIKE Brand futures are up 9%; 6% on a currency neutral basis. Converse continues to expand in virtually every dimension of the business, product, brand and financial. Hurley is outperforming all competitors in their market. Umbro has delivered over 20% revenue growth year to date and is poised for a positive World Cup season. And NIKE Golf and Cole Haan continue to deliver innovation and manage healthy inventories and are well positioned for recovery in their industries. It's important to remember how we're able to deliver this kind of quarter in this kind of environment. Now many of the reasons are familiar to you. Now we have the most compelling and innovative product. We have deep and meaningful relationships with consumers. We run this company with an eye toward efficiency, opportunity and growth. Two things I want to cover in a bit more depth. The first is apparel. This is the single biggest opportunity for NIKE, Inc. We're already one of the world's largest apparel companies, but that's nothing compared to what's possible in this space. Two years ago we refocused the apparel business with specific objectives for both the performance and sportswear sides of the business. Our performance apparel continues to be strong and lead in innovation, gaining market share and creating growth. For NIKE performance is the anchor of our brands. You see it in the national team kits we launched in London, and in the competitive and replica apparel for the Vancouver Winter games. In every category, performance takes the lead. In Sportswear, we see the benefits of being a good editor on the product level. We are focusing on fewer, more productive styles, and that helps us skew some crucial benefits; a clear premium position for the brand, a powerful connection to performance and ultimately a more efficient and more profitable apparel business. When we amplify this connection to sports, we create more distinction for the brand and we offer easier and more attractive choices for consumers. And NIKE has the unique ability to pull that lever.

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We have been working on our apparel business for some time and we really began to see the impact in Q3. NIKE Brand apparel revenues grew 3% for the quarter, while gross margins expanded 160 basis points and inventories fell 8%. We're also starting to realize the broader benefits of becoming a better retailer. Over the past few years, we've spoken about expanding our direct to consumer business. We saw a huge upside to bringing innovation and excitement into the marketplace in our own stores, with our wholesale partners and online. To do that we committed to building our retail capabilities, smoother product flow, surgical assortment planning that focuses on key items, more compelling merchandising, stronger brand stories and more efficient back of house systems. All balanced to produce greater consumer experiences and strong profitability. It's a powerful mix that helped NIKE Brand Retail deliver 11% revenue growth and 140 basis points of gross margin expansion year to date. We will continue to invest in bringing world class solutions to consumers who are hungry for new retail experiences. Nike Zoom KD VII Nowhere is this more important than online. The digital lifestyle is driving dramatic change in our industry and significant potential to our company. We are attacking that in every dimension; online shopping, customization, immersing our brands in consumer cultures and telling inspiring and entertaining stories. So the question is what can we learn about NIKE by looking at apparel and retail? What can we learn from our surging business in China, where Nike's product innovation and premium brand position continue to connect with the burgeoning middle class? Why are we aggressively expanding digitally enabled sport and creating the next level generation of Nike plus technology? It all shows our ability to create innovation in the marketplace and leverage our resources and capability to deliver growth.

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